Jordan's debt rises 5.2pc to $28bn in H1

Amman, August 25, 2014

Jordan's gross domestic and foreign debt rose 5.2 percent to 20 billion dinars ($28 billion) in the first six months of the year from the end of last year as the kingdom tapped more foreign funds to help its economy cope with an influx of Syrian refugees, finance ministry statistics released on Sunday showed.

The preliminary figures showed that gross net domestic debt stood at 11.7 billion dinars at the end of June, falling from 11.8 billion dinars at the end of 2013.

Foreign debt, mostly to major Western donors and international financial institutions including the IMF, rose to 8.38 billion dinars at the end of June against 7.23 billion dinars at the end of 2013, the data showed.

The rise was attributed to a $1 billion U.S. government backed eurobond the government issued last June.

Public debt has grown steadily since 2011 as the country increasingly resorted to domestic borrowing to finance rising government spending and subsidies, and pay for a higher energy import bill, issuing more Treasury bills and bonds.

The central bank hopes to reduce public debt to 60 percent of GDP in 2017 from 78 percent currently.

The last two years have seen Jordan resort to more foreign financing on preferential terms than domestic borrowing to mitigate the impact of accommodating hundreds of thousands of Syrian refugees.

Jordan's public finances have however steadily improved since last year with a rise in domestic demand and foreign cash flows, including remittances from expatriates in the Gulf.

The aid-dependent kingdom has close business and economic ties to Gulf Arab governments, and has capitalised on a pickup in regional tourism with Syria in turmoil. – Reuters